To: Honorable Public Utilities Board Submitted by: /s/ Rebecca Irwin Assistant GM Customer Resources. From: Meredith Owens Approved by: /s/

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1 AGENDA ITEM NO.: 5.B.1 MEETING DATE: 12/14/2015 ADMINISTRATIVE REPORT NO.: To: Honorable Public Utilities Board Submitted by: /s/ Rebecca Irwin Assistant GM Customer Resources From: Meredith Owens Approved by: /s/ Utility Energy Analyst Glenn O. Steiger General Manager Subject: By Resolution, Authorize the General Manager to Enter into a Two-Year Professional Services Agreement under PS with Ecology Action of Santa Cruz to Provide a Non-Residential Direct-Install Lighting, HVAC, and Refrigeration Program for an Amount Not to Exceed $1,100,000 RECOMMENDATION By Resolution, authorize the General Manager to enter into a two-year Professional Services Agreement under PS with Ecology Action of Santa Cruz to provide a non-residential direct-install lighting, HVAC, and refrigeration program for an amount not to exceed $1,100,000. BACKGROUND Alameda Municipal Power (AMP) is committed to energy efficiency and since 1991 has provided programs and services to help customers use electricity efficiently. AMP s energy efficiency programs have not only provided energy savings for customers, but are also aligned with the utility s goals to meet Public Utilities Board-approved energy efficiency targets while complying with California Assembly Bills 1890 and 2021, and the Western Area Power Administration. AMP has approximately 4,000 non-residential customers. Many non-residential customers, particularly small customers, have difficulty participating in energy efficiency programs due to lack of knowledge of energy efficiency technologies, compliance with codes such as Title 24 CA Building Energy Efficiency Standards, the confines of the landlord/tenant situation, limited funds, and staff resources. Therefore in August 2014, staff issued a Request for Proposals (RFP) for a Commercial Lighting Direct Install Program Administrator. This program was focused on removing the barriers to commercial customers to complete lighting retrofits. The intent was for the Program Administrator (PA) to create and implement a direct install, comprehensive, turnkey approach to commercial lighting retrofits that delivered cost-effective, reliable energy savings and rebates to customers and that supported AMP s greenhouse gas emissions reduction efforts.

2 AGENDA ITEM NO.: 5.B.2 MEETING DATE: 12/14/2015 ADMINISTRATIVE REPORT NO.: The program was a one-stop shop that provided a seamless customer experience from audit to installation to rebate and was offered to all AMP commercial customers, with a special emphasis on small and medium commercial customers. The selected PA, Ecology Action of Santa Cruz, implemented and managed the program and the prequalified lighting installer on behalf of AMP. The term of the program was a little over one year, the budget was $600,000 and the target was 1,621,122 kwh in energy efficiency savings. AMP staff worked closely on the program design with the PA, including the marketing strategies, development of energy efficiency measures and rebates, all program policies and procedures, tracking, and reporting. Additionally, AMP staff had overall management of the program and day-to-day oversight to ensure compliance with the scope of work and a high level of customer satisfaction. There were 35 customer projects completed in the Commercial Lighting Direct Install Program. 74 percent of the participants were small commercial customers who had never participated in AMP energy efficiency programs. The types of customers included gas stations, retail, restaurants, a mortuary, and a veterinarian. 12 percent of the participants were medium commercial customers, including two assisted living facilities, a warehouse, and an event center. 14 percent of the participants were large commercial customers. Those projects included retrofitting all of the South Shore Shopping Center parking lot with lighting with energy efficiency light emitting diode (LEDs), and retrofitting all the exterior lighting at the shipyard, Bay, Ship, and Yacht, one of the City of Alameda s largest employers. A goal of the program was to increase the awareness of AMP s energy efficiency programs and services to all customers. AMP staff posted several testimonials of program participants on the AMP website, AMP Facebook, and the Flash monthly newsletter. Overall, program participants were very pleased with the results. Small businesses, in particular, said it was great to have the PA do the lighting audit, specify the new lighting, manage the project, and ensure the retrofit was done correctly. Also, they were pleased the retrofits were done in a manner that did not disrupt their operations and the improvement in light quality was a bonus. The estimated results of the program were: 1,656, kwh - energy efficiency savings kw - demand reduction 1.92 TRC - results of Total Resource Cost test (if >1, the program passes) $ utility levelized program cost, which is comparable to AMP s avoided cost of providing electricity of approximately $0.10/kWh

3 AGENDA ITEM NO.: 5.B.3 MEETING DATE: 12/14/2015 ADMINISTRATIVE REPORT NO.: DISCUSSION Based on the success of the Commercial Lighting Direct Install program, AMP chose to increase the scope of the direct install program to include all non-residential customers, add refrigeration and HVAC measures, and extend the term of the program to two years. On September 16, 2015, staff issued an RFP for a Non-Residential Direct Install Lighting, HVAC, and Refrigeration Program (Non-Res D/I). The program will operate for a term of two years, with the option to renew annually for up to a total of three additional years, subject to approval of funding by the Public Utilities Board. The program will be performance-based upon the first year kwh savings and the total contract amount for the initial contract term is not to exceed $1.1 million. The Non-res D/I program is expected to deliver 3,000 megawatt-hours of cost-effective, reliable energy savings that will support AMP s greenhouse gas emissions reduction efforts and result in a high customer participation and satisfaction rates. Additionally, the program must be fully operational within two months of the contract start date, the total resource cost test result must be greater than one, and the utility levelized cost over the lifetime of the program measures must be less than $0.06/kWh. The RFP was sent to 34 potential bidders, posted in the Alameda Journal and on AMP s website. The Non-Res D/I program is modeled after the successful Commercial Lighting Direct Install Program, with the addition of HVAC and refrigeration measures. On October 14, 2015, three proposals were received and opened. A team of five staff from the Customer Resource Division were tasked with evaluating the proposals, contacting references, interviewing the vendors, and making a final selection. The team used a detailed scoring matrix to evaluate the proposals and references from a quantitative perspective. The scoring matrix included: Related experience and examples of work for two programs similar in size and complexity to AMP s proposed Non-Res D/I References Financial Statement List of utilities, particularly small utilities, for which they have provided similar services Fee schedule Direct customer benefit Ability to meet City of Alameda contract requirements Overall quality of the proposal Next, the team interviewed the vendors between October 27 and November 4, All vendors made presentations and answered questions from the team. The team questions were qualitative in nature and focused on how the program would operate from the customer perspective, the vendors proposed policies and procedures, expectations from AMP staff, and the types of previous customer participant surveys and results.

4 AGENDA ITEM NO.: 5.B.4 MEETING DATE: 12/14/2015 ADMINISTRATIVE REPORT NO.: Based upon the team s quantitative and qualitative evaluation, staff recommends AMP enter into a Professional Services Agreement with Ecology Action of Santa Cruz for the Non- Residential Direct Install Lighting, HVAC, and Refrigeration Program. Ecology Action of Santa Cruz received the highest quantitative and qualitative scores from the team. Staff selected Ecology Action of Santa Cruz because of their extensive successful experience with other small utilities and projects similar in scope and size as AMP s proposed Non-Res D/I, competitive fees, and good fit with AMP s customers and their needs. NEXT STEPS Upon Board authorization by Resolution of the General Manager to enter into a PSA with Ecology Action of Santa Cruz, the contract will be fully executed and work will begin to implement the program. The program implementation is estimated to start January 4, FINANCIAL IMPACT The approved FY 2016 Customer Resources Division budget has sufficient funds for the implementation of the Non-Residential Direct-Install Lighting, HVAC, and Refrigeration Program. The Board has previously approved the use of the proceeds from the sale of renewable energy credits for this project. LINKS TO KEY RESULT AREAS AND GOALS KRA 1: Customer Programs & Experience Goal 1.1: Ensure that customers have a positive experience Goal 1.2: Increase customer energy efficiency Initiative 1.2.2: Implementation of REC expenditures for energy efficiency EXHIBITS A. Resolution B. Professional Services Agreement

5 CITY OF ALAMEDA ALAMEDA MUNICIPAL POWER RESOLUTION NO. AWARD TWO-YEAR PROFESSIONAL SERVICES AGREEMENT UNDER THE SPECIFICATIONS PS WITH ECOLOGY ACTION OF SANTA CRUZ TO PROVIDE A NON-RESIDENTIAL DIRECT-INSTALL LIGHTING, HVAC, AND REFRIGERATION PROGRAM FOR AN AMOUNT NOT TO EXCEED $1,100,000 (Specification No. PS ) WHEREAS, Specification No. PS was issued to obtain bids from qualified vendors for a Program Administrator to provide a non-residential direct-install lighting, HVAC, and refrigeration Program; and WHEREAS, on October 14, 2015, Alameda Municipal Power received a total of three proposals; and WHEREAS, a team of five staff from Alameda Municipal Power s Customer Resources Division evaluated the proposals from a quantitative perspective; and WHEREAS, the team interviewed all three vendors between October 27 and November 4, 2015 from a qualitative perspective; and WHEREAS, Ecology Action received the highest score from the team on the quantitative and qualitative scoring; and NOW, THEREFORE, BE IT RESOLVED that the Public Utilities Board of the City of Alameda hereby authorizes the General Manager to enter into a two-year Professional Services Agreement under specifications of PS with Ecology Action to provide a non-residential direct-install lighting, HVAC, and refrigeration program for an amount not to exceed $1,100,000; and further authorizes the general manager to sign said contract. By: /s/ Alan Cohen Assistant City Attorney AGENDA ITEM NO.: 5.B. MEETING DATE: 12/14/2015 EXHIBIT A Page 1 of 1

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